FRUIT STARCH SUGAR
The natural upgrade
Sustainability along AGRANA’s value chain 2020|21
1 AGRANA‘S UNDERSTANDING OF SUSTAINABILITY
Balance of economic, environmental and social responsibility
AT AGRANA, WE …
▪ utilise almost 100% of the raw materials employed and use low-emission technologies to minimise impacts on the environment ▪ respect all our stakeholders and the communities where we operate ▪ engage in long-term partnerships
2 #TAKING RESPONSIBILITY FOR THE FUTURE
The warming climate and long absences of precipitation are already having an impact on European agriculture and the processing industry. At the same time, AGRANA‘s energy-intensive processing of agricultural raw materials contributes to climate change.
▪ Responsible and complete utilisation of agricultural raw materials has always been important to AGRANA ▪ Stepping up of research activities in the agricultural sector, in view of the changing climate and the limited availability of crop protection products at the AGRANA Research & Innovation Centre (ARIC)
▪ AGRANA is committed to the goal of CO2-neutral production by 2040! ▪ To decarbonise its production processes, AGRANA will intensify the use of low-protein raw material residues for energy generation to replace fossil energy sources
▪ 56 % of products produced and sold by AGRANA already make a contribution to protecting the climate, ecosystems and to the circular economy
3 AGRANA‘S CORE SUBJECTS ALONG THE VALUE CHAIN
RAW MATERIAL ECO-EFFICIENCY OUR EMPLOYEES PRODUCT COMPLIANCE PROCUREMENT OF OUR RESPONSIBILITY PRODUCTION
Environmental and social criteria in the Labour practices and Product responsibility sourcing of Environmental and and sustainable agricultural raw human rights of Compliance and energy aspects of employees products materials production business conduct
Sustainability Reporting: ▪ Acc. to GRI integrated in AGRANA‘s annual reports since 2012|13 ▪ Since 2016|17 audited by KPMG ▪ All data and information provided in this presentation is reported within the GRI-reporting boundaries (www.agrana.com/index.php?id=6920&L=1)
4 SUPPLY CHAIN ENVIRONMENTAL & SOCIAL CRITERIA IN THE SOURCING OF AGRICULTURAL RAW MATERIALS
5 PROCESSING OF 8.4 M TONNES OF AGRICULTURAL RAW MATERIALS
0.81 0.3
2.44 4.6
➢ SALES OF 5.4 M TONNES OF Sugar Beet HIGH-QUALITY PRODUCTS Raw Sugar Grains 0.22 Potatoes Fruit in m tonnes incl. 100% of the volumes of the Joint Ventures HUNGRANA and STUDEN 6 RAW MATERIAL PROCUREMENT ENGAGEMENT IN THE UPSTREAM VALUE CHAIN
Social criteria in procurement
▪ Reference on AGRANA Code of Conduct in Terms & Conditions as well as individual contracts
Environmental criteria in procurement
▪ Reference on AGRANA Principles for the procurement of agricultural raw materials and intermediate products (incl. the AGRANA Code of Conduct) in Terms & Conditions as well as individual contracts
7 RAW MATERIAL PROCUREMENT SUSTAINABLE AGRICULTURE INITIATIVE PLATFORM (SAI)
▪ SAI Platform is an initiative of stakeholders of the food industry, founded in 2002 by Nestlé, Unilever and Danone.
▪ SAI Platform develops principles and practices of sustainable Farm Sustainability Assessment (FSA) & agriculture Benchmarking Tool ▪ SAI Platform‘s 2 major tools to document sustainable ▪ FSA is a questionnaire (applicable worldwide), that environmental and social practices in the agricultural value enables agricultural producers to assess the status of their chain operations in terms of environmentally and socially • Farm Sustainability Assessment (FSA) sustainable production (112 questions on farm management, soil and nutrient • Benchmarking Tool for international certification standards & management as well as plant national legislation protection). ▪ The benchmarking tool ▪ AGRANA Beteiligungs-AG has been a member since 2014 compares requirements of internat. certification standards ▪ AGRANA is the only member that uses the FSA-questionnaire with the requirements of the FSA-questionnaire for several different crops worldwide to assess its suppliers!
8 SAI FSA RESULTS SUGAR BEET, POTATOES AND APPLES FROM CONTRACT GROWING
Raw material Country Consolidated results per Segment/Division and raw material category
Sugar beet Austria In 2020, in Austria and the Czech Republic, all farms achieved at least FSA Silver status. Czech Rep. For Romania, Slovakia and Hungary it was not1 possible to complete the audits due to Slovakia the COVID-19 restrictions. That’s why their attestations issued 2017 stay valid till mid Hungary 2021. At the first verification, all Slovakian farms achieved at least FSA Silver status, this was the case for 96% in Hungary and 31% in Romania Romania. Potatoes and Austria AGRANA Starch uses the FSA systematic to engage its Austrian contract growers of specialty potatoes and specialty maize in so-called Farm Management Groups. In 2017, these maize groups were audited by an external verification body according to the FSA requirements, in 2020 the re-verification audits took place: 100% of the FMG members achieved at least FSA Silver status. Apples Hungary Hungarian and Polish contract growers of resistant apple sorts (“re-sorts”) participated in the mandatory FSA-self-assessment and external audits according to FSA-rules. Poland Therefore, Austria Juice is allowed to claim at least FSA Silver status for its Hungarian and Polish re-sorts-suppliers.
9 RAW MATERIAL PROCUREMENT ENGAGEMENT IN THE UPSTREAM VALUE CHAIN
SUGAR BEET
▪ Established network of AGRANA-agronomists provides consulting on good agricultural practices to contract growers (e.g. sugar beet farmers, potato growers…) ▪ “AGRANA4You” – programme to foster cooperation in contract growing ▪ Voluntary SAI FSA self-assessment for contract farmers of sugar beet as of the growing season 2015 ▪ As of 2017, mandatory SAI FSA-assessment and external audits for contract growers
10 RAW MATERIAL PROCUREMENT ENGAGEMENT IN THE UPSTREAM VALUE CHAIN
▪ Contract growing of potatoes (AT, CZ) and corn (wet-corn at EZG, AT)
▪ Voluntary SAI FSA-self assessments of contract potato growers in Austria as of 2015
▪ In 2017, mandatory FSA-assessment and external audits by SAI-approved auditors of randomly selected contract growers of potatoes and corn in Austria according to the SAI FSA Implementation Framework & SAI Audit Protocol
▪ ISCC-and AACS certification of cereals for wheat starch and bioethanol production (equals FSA silver status)
▪ Processing of organic wheat at the wheat starch plant in Pischelsdorf, since 2015
▪ Biodiversity: conservation of endangered bat and bee populations
11 RAW MATERIAL PROCUREMENT ACTIVITIES IN THE VALUE CHAIN OF FRUIT PREPARATIONS
▪ Only customer specific sourcing of raw materials; in 2019|20, 16.7% of ingredients (fruit and others) processed were sustainable (i.e. mostly certified to organic standards) ▪ Evaluation of suppliers for their adherence to social criteria through SEDEX; in 2019|20, 94 % of suppliers accepted AGRANA‘s SEDEX invitation and shared their self assessments‘ results ▪ Established network of AGRANA agronomists to consult contract growers ▪ Project in Mexico: ▪ AGRANA supports interested farmers to professionalise apple cultivation in the Mexican state of Puebla in line with sustainability criteria
12 RAW MATERIAL PROCUREMENT ACTIVITIES IN THE VALUE CHAIN OF FRUIT JUICE CONCENTRATES • Implementation of a sustainable and state-of-the-art apple growing system taking into consideration sustainability aspects and traceability of the product
• In cooperation with the Dresden Pillnitz breeding institute, so called RESISTANT apple sorts („Re-sorts“) were identified as best choice to be cultivated under the given climatic conditions to reach the strategic targets.
• Development of a cooperation model between AUSTRIA JUICE and Hungarian farmers in order to encourage the farmers to plant these re-varieties. Benefits of Re-Sorts ▪ 60-80 % less pesticide use than regular varieties ▪ Less environmental impact ▪ Secured traceability ▪ Close cooperation with farmers enables the use of SAI’s FAS questionnaire
13 RAW MATERIAL PROCUREMENT SUSTAINABLE JUICE COVENANT
▪ In 2018, AUSTRIA JUICE became a member of the Sustainable Juice Covenant ▪ The Sustainable Juice Covenant is a global initiative of the major beverage manufacturers, aimed at making the procurement, production and marketing of fruit- and vegetable-based juices, purees and juice concentrates 100% sustainable by the year 2030 ▪ The Sustainable Juice Covenant accepts the Farm Sustainability Assessment (FSA) of the Sustainable Agriculture Initiative Platform (SAI) as the central proof of sustainability
14 AGRANA PRODUCTION ENVIRONMENTAL AND ENERGY ASPECTS OF PRODUCTION
15 ECO-EFFICIENCY OF OUR PRODUCTION EFFICIENT USE OF RESOURCES
EFFICIENT USE OF AGRICULTURAL RAW MATERIALS 98.6 – 99.9% use of agricultural raw materials AGRANA’s high utilisation rate reflects: ▪ The efficient use of raw materials ▪ as well as its technological innovativeness and product development capabilities ➢ Efficient use of raw materials is an economic imperative and a way of practicing corporate social responsibility ➢ Reduction of waste
16 ECO-EFFICIENCY OF OUR PRODUCTION WASTE
▪ It is AGRANA’s operating principle to maximise the utilisation of agricultural raw materials by making valuable by-products, contributing to the economic and social bottom line. ▪ The production of a wide range of by-products reduces the amount of waste to an absolute minimum! ▪ The by-products make a substantial contribution to the Group’s profitability and fulfil an ecological function (minerals and other nutrients are returned to the natural environment, thus creating a desirable closed ecological loop) ▪ On average only 21.7 kg of waste generated per ton of product output in the AGRANA Group, thereof 152 grams of hazardous waste AGRANA Group 2019|20 2018|19 2017|18 Tonnes, except per tonne amounts
Waste disposed 90,447 t 107,917 t 122,448 t - of which hazardous waste 634 t 585 t 489 t Kilogrammes of waste per 21.7 kg 25.9 kg 26.2 kg tonne of product
- Of which grammes of 152 g 140 g 105 g hazardous waste per tonne of product
17 ECO-EFFICIENCY OF OUR PRODUCTION ENERGY USE & ENERGY MIX AGRANA GROUP
18 ECO-EFFICIENCY OF OUR PRODUCTION EMISSIONS & DECARBONISATION AGRANA GROUP DECARBONISATION BY 2040! AGRANA is committed to the goal of CO2-neutral production by 2040. TENTIAL MEASURES: Potential measures: ▪ To decarbonise its production processes, AGRANA will intensify the use of low-proteine raw material residues for energy generation (e.g. like at its Kaposvár|HU sugar factory) to replace fossil energy sources ▪ Use of electricity from renewable sources
▪ Compensation of CO2-emissions through verified international projects ➢ In 2020|21, AGRANA will develop a concrete, staged plan for decarbonisation by 2040.
19 ECO-EFFICIENCY OF OUR PRODUCTION ENVIRONMENTAL AND ENERGY HIGHLIGHTS
▪ Energy efficiency measures are the first ecological, economical and social priority for AGRANA ▪ Since 2014|15, energy-management-systems’ certification according to ISO 50001 in many production plants in the EU (in 2019|20, 47.3 % of sites worldwide held an ISO 50001 certification) ▪ Low temperature dryers installed at the Tulln & Leopoldsdorf sites, both Austria, have saved more than 240,000 tonnes CO2equ. since their installation in 2011|12 ▪ Target: energy-self-sufficiency in terms of figures of the sugar plant Kaposvár|HU ▪ The Kaposvár sugar plant in Hungary generated about 23 m cubic metres of biogas from beet pulp in the 2019|20 financial year. This would have been sufficient for the site: ▪ To meet 73 % of its primary energy needs of the 2019|20 beet campaign ▪ But: 9.7 m cubic metres were treated to biomethane for feeding into the local natural gas grid (= annual heating demand of around 2,050 single-family homes).
20 ECO-EFFICIENCY OF OUR PRODUCTION WATER CONSUMPTION AGRANA GROUP
▪ AGRANA frequently uses the water contained in the agricultural raw materials in its processes and makes it available to other water user. ▪ The water is cleaned and reused time and again. ▪ Overall, AGRANA discharges more water than it withdraws thus has a negative water consumption balance. ▪ On-site or external waste water treatment plants ensure that the effluent produced is treated in an environmentally sensitive way in accordance with local thresholds.
21 OUR EMPLOYEES LABOUR PRACTICES AND HUMAN RIGHTS OF EMPLOYEES
22 OUR EMPLOYEES EMPLOYEES & WORKPLACE SAFETY EMPLOYEES – AGRANA Group 2019|20 NON PERMANENT STAFF Total 2,332 Female 67.9 % PERMANENT STAFF Total 7,057 Blue-collar 4,324 White-collar 2,733
Female 30.0% Blue-collar 20.3 % White-collar 45.2 % female female
MANAGERS OF WHICH EXECUTIVE LEADERSHIP ▪ In the 2019|20 financial year, no Total 500 Total 31 fatal accident occurred in the Female 25 % Female 12.9 % AGRANA Group. WORKPLACE SAFETY – AGRANA Group 2019|20 ▪ In the 2019|20 financial year, Injury rate Rate of high- Rate of fatalities (fatalities =(accidents/100 consequence due to accidents/100 employees there were 15 accidents of employees p.a.) p.a.) injuries (high- AGRANA contractors. For consequence injuries/100 organisational reasons, these are employees p.a.) not included in the AGRANA Total 1.6 0.0 0.0 workplace safety data such as the Female 0.8 0.0 0.0 injury rate, lost day rate and Male 2.1 0.1 0.0 absentee rate.
23 LABOUR PRACTICES AND HUMAN RIGHTS PRODUCT RESPONSIBILITY AND SUSTAINABLE PRODUCTS ASSESSMENTS & AUDITS OF SOCIAL CRITERIA AT AGRANA AND ITS SUPPLIERS
▪ AGRANA Beteiligungs-AG has been a SEDEX (Supplier Ethical Data Exchange) member since 2009 ▪ All AGRANA sites complete the SEDEX self-assessment once a year ▪ 45.5 % of AGRANA sites also have a valid external audit (SMETA or similar) based on their self-assessment (2019|20) ▪ Audit reports are available to SEDEX-members on the website of the organisation ▪ The fruit preparation division uses SEDEX also for the social assessment of its fruit suppliers
24 SUSTAINABLE PRODUCTS PRODUCT RESPONSIBILITY
25 PRODUCT RESPONSIBILITY AND SUSTAINABLE PRODUCTS MEMBERSHIPS IN MAJOR INITIATIVES
Initiative Member companies since Initiative aim and other members • Aim: Develop guidelines for and implement sustainable agriculture Sustainable Agriculture Initiative July AGRANA Beteiligungs-AG* practices Platform (SAI) 2014 • Members: food and beverage industry • Aim: global initiative for sustainable production of fruit- and vegetable-based juices, purees and juice concentrates The Sustainable Juice Covenant AUSTRIA Juice GmbH 2018 • Members: beverage industry, especially members of the European Fruit Juice Association (AIJN) • Aim: Promote sustainable social and environmental practices alone Supplier Ethical Data Exchange AGRANA Beteiligungs-AG* 2009 the value chain (SEDEX) • Members: about 60,000 companies worldwide AUSTRIA JUICE GmbH • Aim: Supplier assessment on environmental and social criteria along and some sites of Fruit segment; their entire value chain Ecovadis 2013 AGRANA Stärke GmbH • Members: companies in a wide range of industries Segment Zucker GmbH • Aim: Promote and safeguard Austrian GMO-free agriculture and food Arge Gentechnik frei AGRANA Beteiligungs-AG* 2010 production (Platform GMO-Free) • Members: entire food value chain, including many retailers
• Aim: Sustainable, GMO-free soya production in the Danube region Initiative Donau Soja April AGRANA Stärke GmbH (focus on animal feed) (Danube Soya Initiative) 2013 • Members: entire value chain, NGOs, etc.
*AGRANA Beteiligungs-AG, representing all AGRANA-Group companies. 26 PRODUCT RESPONSIBILITY AND SUSTAINABLE PRODUCTS “AGRANA PRODUCTS AS PART OF THE SOLUTION”
Definition of sustainable or climate-friendly products at AGRANA:
▪ Products certified to an organic standard
▪ Products made of „FSA-audited raw materials“ (gold and silver status only)
▪ Substitutes for fossil products (bioethanol, starches for glues/cosmetics)
▪ Products from circular economies; i.e. all AGRANA by-products (feedstuffs and fertilizers)
➢ Using these criteria, about 56 % of AGRANA products sold in 2019|20 qualified as sustainable or climate-friendly.
27 PRODUCT RESPONSIBILITY AND SUSTAINABLE PRODUCTS GMO-FREE & ORGANIC PRODUCTS
▪ AGRANA does not make products anywhere in the world that require GMO labelling under local laws (for example, in the EU under Reg. EC No 1829/2003 and 1830/2003).
▪ AGRANA offers certified GMO-free products in the fruit segment (esp. in the US), in the starch business and the sugar segment (e.g. „Wiener Zucker“).
▪ AGRANA has the necessary certifications in its plants and supply chain to be able to fill customer needs for organically made foods, feeds and other products.
28 BIOPLASTICS FROM THERMOPLASTIC STARCHES REPLACE REGULAR PLASTIC
▪ Thermoplastic starches form the basis for compound products for the use in applications, such as film extrusion and injection moulding
▪ 100% home-compostable without leaving microplastic residues ▪ Decay time: 6 months ▪ Biodegradable time: 12 months
29 PRODUCT RESPONSIBILITY AND SUSTAINABLE PRODUCTS STARCH SPECIALITIES
▪ Starch products replace ingredients of fossil Each Pritt glue stick origin! (e.g. Green Glues) contains approx. 70% potato starch ▪ Focus on highly refined specialty products from Gmünd
▪ Focus on organic and GMO-free starches and Clean Label products
▪ Specialty starches for the paper, textile, cosmetics, pharmaceutical and building materials industries Presentation of an innovative styling foam conditioner with starch instead of microplastics
30 PRODUCT RESPONSIBILITY AND SUSTAINABLE PRODUCTS COMPLETE UTILISATION POTATO - POTATO FIBRE ▪ Capacity expansion, installation of a potato starch dryer and a potato fibre dryer in Gmünd (AT)
▪ Investment (by 2020): € 40 m
▪ Added value: Processing the previously unused by-product "potato pulp" into potato fibre for use in the food industry
▪ Potato fibre can be used in many ways in food:
- Reduction of energy density (carbohydrates & fat)
- Dietary fibre enrichment & prebiotic effect
- Increased dough yield
- Texture improvement for meat products
- Improved freshness and crispness in bread and bakery products
31 PRODUCT RESPONSIBILITY AND SUSTAINABLE PRODUCTS COMPLETE UTILISATION SUGAR BEET - CRYSTALLINE BETAINE ▪ April 2019: Ground-breaking for the construction of a crystalline betaine production plant as part of a JV of AGRANA & Amalgamated Sugar Company|USA
▪ Investment: €40 m
▪ Commissioning in August 2020
▪ Tulln will be the third production site in the world to produce natural high quality crystalline betaine
▪ Annual production capacity : 8,500 t crystalline betaine
▪ Betaine fields of application :
- Animal husbandry: as an ingredient in animal feedstuffs
- Food supplements
- Sports drinks (muscle building)
- Cosmetics (regulating effect on water balance in cells)
- Tensides or active washing substances, e.g. shampoos, hair conditioners (foam- stabilizing, slightly firming)
32 COMPLIANCE COMPLIANCE AND BUSINESS CONDUCT
33 COMPLIANCE AND BUSINESS CONDUCT AGRANA VALUES
THE MOST IMPORTANT DOCUMENTS
▪ AGRANA Vision & Mission ▪ AGRANA Code of Conduct ▪ AGRANA Competition Compliance Guideline ▪ AGRANA Conflict of Interest ▪ AGRANA Privacy Policy ▪ AGRANA Quality Vision & Mission ▪ AGRANA Principles for the Procurement of Agricultural Raw Materials and Intermediate Products ▪ AGRANA Environmental Policy ▪ AGRANA Guideline on Responsible Marketing ▪ AGRANA Guideline Whistleblowing System
34 COMPLIANCE AND BUSINESS CONDUCT COMPLIANCE
ORGANISATIONAL STRUCTURE ▪ Compliance Office led by the Director Corporate Compliance ▪ Tasks Compliance Officer: development and implementation of internal policies, providing support in compliance matters, conducting of compliance trainings, documenting of cases of non-compliance ▪ Compliance Board (Ethics Committee) including: Director Corporate Compliance, General Secretary, Internal Audit department (IA), Legal department
INTERNAL AUDITS ON CORRUPTION
▪ IA verifies the compliance with laws, regulations and internal policies ▪ In the 2019|20 business year, IA audited 25 (45.5 %) of the 55 AGRANA sites within the GRI reporting boundaries including regarding corruption and fraud ▪ No significant breaches of legal norms regarding anti-corruption or internal guidelines were found.
35 SUSTAINABLE DEVELOPMENT GOALS AGRANA‘S SUSTAINABILITY MEASURES CONTRIBUTE TO A WIDE RANGE OF SDGS
• In Sept. 2015, the UN General Assembly adopted the Agenda 2030, at it hearts are the: Sustainable Development Goals (SDGs): 17 goals with 169 targets underneath
• They provide a holistic framework that requires businesses to contribute to their achievement over the next 15 years. Source: UN; matching of GRI-Indicators and SDGs on www.sdgcompass.org
36 SUSTAINABILITY ALONG AGRANA‘S VALUE CHAIN
At a glance: wsk-mini.agrana.com/index-en.html … or wsk.agrana.com/en
37 DISCLAIMER
This presentation is being provided to you solely for your information and may not be reproduced or further distributed to any other person or published, in whole or in part, for any purpose. This presentation comprises the written materials/slides for a presentation concerning AGRANA Beteiligungs-AG (“Company”) and its business. This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares in the Company, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or investment decision. This presentation includes forward-looking statements, i.e. statements that are not historical facts, including statements about the Company's beliefs and expectations and the Company's targets for future performance are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore investors should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update publicly any of them in light of new information or future events. Although care has been taken to ensure that the facts stated in the presentation are accurate, and that the opinions expressed are fair and reasonable, the contents of this presentation have not been verified by the Company no representation or warranty, express or implied, is given by or on behalf of the Company any of its respective directors, or any other person as to the accuracy or completeness of the information or opinions contained in this presentation. Neither the Company nor any of its respective members, organs, representatives or employees or any other person accepts any liability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. Trade secrets mentioned in the presentation are confidential and may only be passed on according to the “need to know” principle. Passing on to unauthorized persons is strictly forbidden and may lead to disciplinary consequences and claims for compensation of damages.
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